We needed to have the press be our friend… We wanted them to ask the
questions we want to answer so that they report the news the way we want it to be reported.
—Tea Party Senate candidate Sharron Angle, August 2, 2010
The very first Great Crash in our nation’s history—that of the economic exploitation in colonial America, which was followed by the Revolutionary War—was kicked off by a “Tea Party.”
We learn about the Boston Tea Party in elementary school. But rarely do we learn what really triggered this event (another consequence of the Great Forgetting).
As was mentioned in chapter 1, the Boston Tea Party was a revolt against the Economic Royalists, who had seized the British government and passed the world’s largest corporate tax break at the time, devastating colonial tea sellers.
The purpose of the Tea Act was to increase the profitability of the East India
Company to its stockholders (which included the king) and to help the company drive its colonial small-business competitors out of business. Because the company
temporarily no longer had to pay high taxes to England and held a monopoly on the tea it sold in the American colonies, it was able to lower its tea prices to undercut those of the local importers and the mom-and-pop tea merchants and teahouses in every town in America.
In response, in December 1773, a group of Bostonians boarded ships belonging to the East India Company and committed one of the largest acts of corporate vandalism in the history of the world—throwing what would be today millions of dollars’ worth of tea into the harbor.
War would soon follow.
Today, as the great cycles come back around, and battle with the Royalists
reconvenes, the “Tea Party” has returned. Only this time, the Royalists are the ones dressed silly.
A Tea Party Reimagined
It’s hard to figure out when exactly the twenty-first-century Tea Party “started.”
The sentiment that government should be supersmall, that taxes are evil, and that social safety nets encourage laziness has existed in America since its founding, albeit usually only on the fringes of society. But what exactly caused tens of thousands of
Americans around the country to start dressing up in eighteenth-century garb and dangling tea bags from tricornered hats in the summer of 2009 is a little trickier than those simple slogans.
The prominent Tea Party organization, the Tea Party Patriots, attributes the
beginning of the Tea Party to a rant by CNBC talking head Rick Santelli in February 2009—less than a month after President Obama took office.* Santelli was reporting from the floor of the Chicago Stock Exchange when he went off on a program being floated by the Obama administration to help struggling homeowners during the height of the foreclosure crisis that was sweeping across the nation.
Santelli went unhinged while live on the air, yelling, “The government is promoting bad behavior… How about this president and new administration? Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages.”
By “losers,” Santelli was referring to struggling homeowners who had been hustled into buying adjustable-rate mortgages by predatory salesmen out to make a quick
buck in the banking industry.
Never mind the program being proposed by the Obama administration to deal with that crisis was far weaker than the one passed through Congress by Franklin
Roosevelt, which backstopped people’s mortgages to stop the train wreck of a foreclosure crisis during the Great Depression.
Santelli turned to traders standing nearby and asked, “This is America. How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills? Raise your hand. President Obama, are you listening?”114
The Economic Royalists were listening. And there was already a movement afoot to exploit Santelli’s rant for their own gain. Santelli himself gave up this fact when he shamelessly plugged what was likely the first-of-its-kind Tea Party rally, saying,
“We’re thinking of having a Chicago tea party in July. All you capitalists that want to show up to Lake Michigan, I’m gonna start organizing.”
While on the surface Santelli’s rant may have seemed like the kickoff of the Tea Party movement, a closer look at the facts shows that a “Tea Party” was already being organized even before President Obama took office.
A 2013 study115 published in the scientific journal Tobacco Control revealed that today’s incarnation of the Tea Party goes back a long way—well before the election of Barack Obama.
Talk of a new Tea Party to advance corporate interests in America began in the 1980s and 1990s, when tobacco companies invested heavily in building new broad alliances with other organizations in hopes of fighting back against the emerging antismoking agenda in Congress.
Taking the advice of the Powell Memo, written a decade earlier, tobacco companies such as R. J. Reynolds, Lorillard, and Philip Morris funneled millions of dollars into an organization called Citizens for a Sound Economy (CSE). One funder of CSE is one of the most prominent Royalists of today, David Koch.
The purpose of CSE was to build a coalition of tobacco companies and corporate polluters to oppose regulations on smoking and air pollutants being considered in Congress. It’s estimated that at least $5.3 million was funneled into CSE by Big
Tobacco.
Then in 1993, a Philip Morris PR flack wrote a “Powell-esque” memo outlining a strategy of fighting any new taxes by joining up with other antitax groups to create a
“New Boston Tea Party.”
The memo reads, “Grounded in the theme of ‘The New American Tax Revolution’
or ‘The New Boston Tea Party,’ the campaign activity should take the form of citizens representing the widest constituency base mobilized with signage and other attention- drawing accouterments such as lapel buttons, handouts, petitions and even
costumes.”116
Ultimately, the tobacco companies failed and were hit with a massive $200 billion settlement in 1998. But in 2002, David Koch’s CSE purchased a website domain name:
USTeaParty.com. Eventually, plans for this Tea Party were put on hold. After all, a Republican Royalist, George W. Bush, was in the White House, and Royalists were in control of Congress, so there was no reason to cause any trouble.
Only after the Royalists crashed our economy, and were banished from Congress, would the so-called Tea Party be revived. And sure enough, it was revived by CSE.
Only, by now, CSE had split into two Astroturf corporate-funded organizations:
Americans for Prosperity and FreedomWorks. Unlike “grassroots,” Astroturf
organizations are propped up by a wealthy elite and rely on corporate cash rather than genuine activism.
Meet the Kochs
Few did more to put the Powell Memo into motion than the billionaire Koch brothers, David and Charles.
They run the massive transnational conglomerate known as Koch Industries,
dealing in everything from petroleum refining and distribution, to chemical processing and ranching.
Koch Industries is the second largest privately held company in the United States, taking home nearly $100 billion in annual revenue. And the Koch brothers occupy spot 4 on the Forbes 400 Richest People in America list, each worth $31 billion.
Together, they are wealthier than Warren Buffett, who is in spot 2 on the list.
They inherited Koch Industries from their father, Fred Koch, who in 1927
discovered a more efficient way of processing crude into gasoline, which he pitched to Joseph Stalin in the Soviet Union and made a fortune.
Despite his collaboration with the communists, Fred Koch was an unapologetic Economic Royalist. Long before Lewis Powell’s memo, Fred helped found the John Birch Society in 1958. It was a group of far-right, fierce anticommunists, who also worked against the civil rights movement in America. They subscribed to the radical economics of neoliberalism, which was still shut out of the mainstream political and economic debate at the time.
But Fred would instill in his sons, Charles and David, this same radical Royalist ideology that would soon gain favor around the world in the 1980s.
Writing in The New Yorker, Jane Mayer talks about the political influence on the Koch brothers, such as the John Birch Society to which they were exposed through
their father.
“Members of the John Birch Society,” she writes, “developed an interest in a school of Austrian economists who promoted free-market ideals. Charles and David Koch were particularly influenced by the work of Friedrich von Hayek… [and his] belief in unfettered capitalism.”
She adds, “Charles and David also became devotees of a more radical thinker, Robert LeFevre, who favored the abolition of the state… LeFevre liked to say that
‘government is a disease masquerading as its own cure.’ ”
David Koch even ran for president in 1980 on the Libertarian ticket, but only
received 1 percent of the vote. As Mayer writes, “The brothers realized that their brand of politics didn’t sell at the ballot box. Charles Koch became openly scornful of
conventional politics. ‘It tends to be a nasty, corrupting business,’ he told a reporter at the time. ‘I’m interested in advancing libertarian ideas.’ ”
And they had a lot of money to do just that.
The Rise of the Kochtopus
When Lewis Powell told Eugene Syndor that the Chamber of Commerce needed to spend more money influencing politics, education, the media, and school curriculums, he might have been better off just addressing the letter to the Koch brothers.
At the onset of the Jimmy Carter presidency, in 1977, they bankrolled the CATO Institute, a think tank devoted to espousing Libertarian—or Royalist—ideology.
Brian Doherty, a senior editor at Reason magazine, interviewed the brothers multiple times. He quoted Charles describing the strategy behind their funding to
“bring about social change.” It was, Charles said, a “vertically and horizontally integrated” endeavor “from idea creation to policy development to education to grassroots organizations to lobbying to litigation to political action.”
After CATO, the Kochs spent millions creating the Mercatus Center at George Mason University, devoted to neoliberal economics and climate change denial.
The Wall Street Journal noted, “When it comes to business regulation in
Washington, Mercatus, Latin for market, has become the most important think tank you’ve never heard of.” The article goes on to say, “Mercatus, with its free-market philosophy, has become a kind of shadow regulatory authority.”
The Mercatus Center is so effective that when oil men George W. Bush and Dick Cheney moved in to the White House in 2001, they sought suggestions for which environmental regulations they should immediately kill off. Of the twenty-three regulations to bite the dust, fourteen were suggested by the Mercatus Center, which has been given more than $14 million by the Kochs since 1998.117
But Koch-funded Royalist spin machines aren’t exclusive to George Mason University.
At Florida State University, Charles Koch inked a multimillion-dollar deal with the economics department to advance Royalist economics. As the St. Petersburg Times reported, “A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5 million for positions in Florida State University’s economics department.
In return, his representatives get to screen and sign off on any hires for a new
program promoting ‘political economy and free enterprise.’ ”118
The article highlights just how pervasive the Koch influence is in the Florida State University deal. “Under the agreement with the Charles G. Koch Charitable
Foundation… faculty only retain the illusion of control. The contract specifies that an advisory committee appointed by Koch decides which candidates should be
considered. The foundation can also withdraw its funding if it’s not happy with the faculty’s choice or if the hires don’t meet ‘objectives’ set by Koch during annual evaluations.” In other words, the Kochs get final say on new professors—especially ones who don’t subscribe to the Kochs’ own free-market economic philosophy. In 2009, Charles Koch nixed nearly 60 percent of the university faculty’s suggestions.119
The Kochs have similar strings-attached deals with public universities all across the country, including West Virginia University, Troy University, Utah State University, and Clemson University. All in all, over 150 higher-education institutions receive
some sort of financial contribution from the Koch brothers—often in the form of quid pro quos. Our higher-education system is being used by Economic Royalists such as the Kochs to fund economic brainwashing and a hearts-and-minds assault against the government.
And the Kochs make no secret that their money comes with strings attached. “If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along with our intent,” he told Doherty. “And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding.”
The Kochs have been behind mind-boggling amounts of political spending.
Koch Industries itself has spent more than $50 million lobbying since 1998. But Jane Mayer, with The New Yorker, cautions, “Only the Kochs know precisely how much they have spent on politics.”
According to tax records, between 1998 and 2008, the Kochs funneled hundreds of millions of dollars through charitable organizations, with much of that money winding up in the hands of political organizations, too.
Mayer writes, “The three main Koch family foundations gave money to thirty-four political and policy organizations, three of which they founded, and several of which they direct. The Kochs and their company have given additional millions to political campaigns, advocacy groups, and lobbyists.”
The National Committee for Responsive Philanthropy produced a report in 2004 questioning the charitable nature of the Kochs’ donations. Their report concludes that the Kochs aren’t actually making charitable contributions; they’re making investments in ideas that will eventually lead to higher profits. According to the report, Koch
foundations “give money to nonprofit organizations that do research and advocacy on issues that impact the profit margin of Koch Industries.”
The International Forum on Globalization has mapped the various organizations and individuals that make up the tentacles of the Kochtopus.
They include media personalities such as Rush Limbaugh and Glenn Beck. Think tanks beyond CATO include the American Enterprise Institute, which has received nearly $2 million in Koch cash, and the Heritage Foundation, which has received more than $4 million. Also benefitting from the Kochs are lobbying organizations such as the US Chamber of Commerce and the American Legislative Exchange Council.
And the Kochs provided nearly $6 million in funding for Americans for Prosperity, one of those organizations that split off from CSE’s tobacco Tea Party in the first
decade of the twenty-first century to form the new Royalist-tinged Tea Party after Barack Obama was elected in 2009.
It takes a lot of money to get the entire political and economic class to buy into an ideology that has repeatedly caused massive economic crashes—especially since the last crash was still fresh in everyone’s mind.
As Charles Koch told Doherty, “We have a radical philosophy.”
The Tea Party, even if birthed by the tobacco companies, was nurtured by multimillionaire Royalists and billionaires such as Charles and David Koch. They spent millions to set up and promote Tea Party organizations, fund rallies, and charter buses to carry people from all around the country to boost participation.
And by the summer of 2009, what appeared to be a full-on grassroots movement, but in the background was a well-oiled, corporate-funded anti-Obama PR machine, had developed all around the country, complete with mostly elderly white Americans shouting down their congressmen and congresswomen, accusing them of being
socialists and pushing secret agendas to raise everybody’s taxes and destroy democracy.
But the Kochs weren’t operating alone. Born out of the Ailes memo for GOP TV in the 1970s, Fox News was now the most watched cable news network in America. And they did their part to squash any sort of Progressive Revolution, and ensure that the Royalists’ counterrevolution succeeds.
Fox News Gets in the Game Bill Sammon got the memo.
On the morning of October 27, 2009, staffers at Fox News received an urgent
message from their boss, the Washington managing editor, Bill Sammon. It had to do with certain wording to be used by Fox anchors when reporting on the health reform debate—in particular, the wording to be used to describe the “Public Option.”
Ten months had passed since Barack Obama and a slew of progressive Democrats in Congress were sworn in, promising to break up the Royalists’ stronghold in our democracy and economy.
First up was the Royalist dominance in our health care system—the only one in the entire developed world that does not offer health care as a basic human right.
The Royalists knew their grip on our nation’s health care system was in danger, so they grabbed ahold of their megaphone to spew disinformation—namely, Roger Ailes.
Fear of “death panels” was one of several myths spun out of the right-wing
messaging campaign funded by big for-profit health insurance corporations opposed to any sort of health reform. It was given credence by Sarah Palin in an August 2009 Facebook post in which she wrote, “The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s
‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their
‘level of productivity in society,’ whether they are worthy of health care. Such a system is downright evil.”
The ironic thing about Palin’s message was that so-called death panels are actually a very real thing in America. Every single day, death panels at for-profit health
insurance corporations determine whether or not it’s worth paying out a certain claim or signing on to a certain lifesaving medical procedure. In those cases, a “subjective judgment” is made on how a cancer patient’s chemotherapy will affect the
corporation’s bottom line.
It was exactly this sort of abuse that President Obama’s Affordable Care Act was trying to curb. But in the perversion of the health reform debate, somehow that message got reversed. And even though there was no such thing as a “death panels”
provision in the health reform bill, it was an issue that dominated much of the health care debate in the summer of 2009.
Another myth was that the president’s health reform would amount to a government takeover of the private health insurance industry. Given the
antigovernment fervor sweeping the nation after thirty years of bad government under Royalist Republicans, this myth gained a lot of traction.
The Royalists warned that President Obama was taking over the American health care system with all its advanced MRI machines and laser surgeries and cutting-edge medication, and transforming it into a socialized, rationed health care system like the ones that were killing off millions of people in “Communist Europe.” It was a myth that everyone who lives outside the United States, in particular in Canada and Europe, regarded as patently absurd. Europeans have far better health care results than
Americans, and nearly every single person I’ve talked to from a nation that has a
single-payer system told me they prefer their health care system to mine any day of the week, thank you very much.
But Royalists were able to find a handful of Canadians who’d had a bad experience with their home health care system and paraded them around as victims of “socialized medicine.” Eventually, like the “death panels” myth, the government takeover myth stuck, too.
It grew out of the Public Option component of the health reform law.
In some parts of the country there was only one health insurance choice for
consumers. One big for-profit health insurance corporation held a monopoly over the local market and could therefore charge whatever they liked and treat their customers however they liked. To inject some competition (the stuff Royalists claim to love) into the market, a government health insurance program was conceived that would serve as a more efficient and compassionate alternative to private health insurance plans. In the proposed health reform legislation, this alternative was known as the Public
Option. The idea is simple, give people a choice and let the free market decide.
The Public Option was a far cry from what progressives wanted, which was a single-payer system. But if private health insurance corporations suddenly had to compete, then maybe prices would get lower and quality would get better.
Royalists hated the idea, as you would expect, since their corporate donors knew that more competition in the markets meant less money diverted to the bonuses of health insurance executives such as “Dollar” Bill McGuire, who made a billion dollars working at United Healthcare.
So Fox News took up the cause. The subject of the Bill Sammon October 27, 2009,